When the Fed increases the money supply, we expect

A) interest rates and stock prices to rise.
B) interest rates and stock prices to fall.
C) interest rates to rise and stock prices to fall.
D) interest rates to fall and stock prices to rise.

Money Supply

The collective sum of all monetary resources in an economy, including cash, coins, and savings and checking account balances, at a particular time.

Interest Rates

The expense associated with taking out a loan or the profit from an investment, presented as a percentage of the initial amount.

Stock Prices

The cost of purchasing a share in a company, reflecting the company's value and investor expectations about its future profitability.